LGP acquires the Meadows mall for EUR 62m

Legal & General Property (LGP) has acquired Meadows Shopping Centre in Essex, from Lend Lease. The investment volume of £56 mln (EUR 62 mln) reflects a net initial yield of 7.75%.

The in-town shopping centre asset has been acquired on behalf of LGP's UK Property Income Fund, which reached its final close last month with a total geared investment capacity of circa £475 mln. asset represents the UK PIF's fourth acquisition, having invested a total of circa £260 mln to date.

Situated in the centre of Chelmsford, the covered shopping centre provides circa 150,000 sq ft (14,000 m2) of prime retail space and 730 car parking spaces, within two car parks. Anchored by BHS and Wilkinson, as well as an eight-screen Odeon Cinema, the scheme contains 39 retail units in total, fully let to a range of multiples. With an average unexpired lease term of over six years, LGP believes the centre provides a defensive income profile over the short term.

'Against a background of increasingly limited debt available and further challenges facing retailers, there continues to be a growing polarisation in the UK shopping centre market,' said Charlie Walker, fund manager of the UK Property Income Fund.

He added: 'I fully expect that there will continue to be a number of less attractive secondary shopping centre assets flooding the market, however, The Meadows, Chelmsford, represents one of only a very small handful of opportunities that provide the right combination of quality, size and location.'

The UK PIF reached its final close in October 2010, having secured commitments totalling £300 mln from 14 major international institutional investors.